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House Bill 533 — Medicaid expansion, county share

House Bill 533 — Medicaid expansion, county share

by
Parrish Miller
February 27, 2020

Bill description: HB 533 winds down the county indigent program and the catastrophic health care cost program, and redirects most of the funds toward Medicaid expansion. 

Rating: -2

Does it create, expand, or enlarge any agency, board, program, function, or activity of government? Conversely, does it eliminate or curtail the size or scope of government?

HB 533 amends and repeals numerous sections of Idaho code in order to wind down the county indigent program. It says, for example, that "no board of county commissioners shall approve an application for financial assistance after this section has been effective for one hundred eighty (180) days." It does allow, however, that "a board of county commissioners may, as necessary, continue to administer county medical assistance relating to applications approved prior to the deadline described in subsection (1) of this section for up to twelve (12) months following the effective date of this section."

(+1)

HB 533 amends and repeals numerous sections of Idaho code in order to wind down the catastrophic health care cost program operated by the state. It says that "no application for financial assistance through the board of the catastrophic health care cost program shall be approved under this chapter if such application is made on or after the one (1) year anniversary of the effective date of this section."

It also states that the program board must make final decisions on all outstanding applications for financial assistance before June 30, 2021. The final payments on medical claims, it adds, shall be disbursed with funds appropriated for fiscal year 2021.

HB 533 says, "Upon final decision of all outstanding applications for financial assistance, the board of the catastrophic health care cost program shall suspend operations, but board members shall retain their appointments." Why these appointments should be retained is unstated.

HB 533 further says, "The department of health and welfare shall act as a fiscal agent to oversee any ongoing administrative actions, including distribution of any remaining outstanding payments from the catastrophic health care cost account and collection of ongoing reimbursements for deposit into that account in accordance with final board decisions."

(+1)

HB 533 would significantly expand the definition of "medically indigent" by removing the stipulation that the medically indigent person must "not have income and other resources available to him from whatever source sufficient to pay for necessary medical services." It would replace it with the stipulation that the individual's "modified adjusted gross income does not exceed one hundred thirty three percent (133%) of the federal poverty level." 

(-1)

Does it increase government spending (for objectionable purposes) or debt? Conversely, does it decrease government spending or debt?

HB 533 would create Section 56-268, Idaho Code, which says that starting on January 1, 2020, each county shall pay a portion of the costs of Medicaid expansion. Specifically, the new law would require that, through quarterly assessments, the counties pay 23% of the costs of Medicaid expansion.

The bill limits increases in the counties' portion of the "annual per member cost of the program" to no more than 3% per year regardless of the actual increase of the cost of Medicaid expansion. This could shift the funding sources for treatments under Medicaid. It could also change the group of taxpayers who would be required to subsidize that care.

Beginning in 2022 and every three years thereafter, the legislative services offices would have to review the funding formula for the counties' portion of Medicaid expansion and report to the Legislature if the "funding sources for Medicaid expansion are sustainable." If they are not, the legislative office would have to suggest other funding options for lawmakers to consider.

According to the fiscal note for the bill, the state will collect at least $6.5 million from the counties to fund Medicaid expansion in calendar year 2020, but that could rise to $9.5 million if Medicaid expansion numbers reach their projected high. 

(-1)

There is an additional problem with the way this bill would have the state calculate how much each county would have to pay. Collectively, the state’s 44 counties would have to pay 23% of the total cost of Medicaid expansion. The counties’ portion would be divided up based on each county’s population, though not how many people in each county use Medicaid. This creates an inequality among the counties and will require the residents of some counties to pay more to subsidize the residents of other countries.

(-1)

Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?

Under current law, counties are allowed to levy a 0.1% property tax on property owners to pay for the county indigent program. Even though HB 533 would end this program, it would let counties continue levying this tax. The revenue from this tax would be spent on "involuntary mental health services." Instead of repealing this burdensome tax, HB 533 merely shifts the money taken from property owners to a different welfare program. 

(-1)

Analyst's Note: HB 533 is a lengthy and complex bill (32 pages, 63 sections) that begins the process of slowly winding down the county indigent program and the state's catastrophic health care cost program, and redirecting the majority of these programs' funding toward Medicaid expansion. The bill repeals more than 30 sections of code related to these programs and creates a few new ones.

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